DWMC: 3rd Quarter 2021 Portfolio Manager Review
Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Returns less than one year are not annualized. For the fund’s most recent standardized and month-end performance, please click www.advisorshares.com/etfs/dwmc.
The AdvisorShares Dorsey Wright Micro-Cap ETF (DWMC) uses relative strength to allocate towards areas of strength in the micro-cap market. The portfolio is systematically managed and reviewed on a daily basis using the Dorsey Wright relative strength ranks. The strategy starts with the smallest 2,000 companies that trade on a US exchange; the securities are then screened for size and liquidity. The companies are each given a relative strength score and the portfolio allocates to approximately 150 – 200 companies that are in the top quartile of the rankings. Securities included are roughly equal- weighted based on the available cash at the time of purchase. This universe and the portfolio are ranked and evaluated for changes on a daily basis. Once a company’s rank fall below a preset threshold, it is removed from the portfolio and the portfolio reallocates to higher relative strength names.
The third quarter was difficult for small and micro-cap companies after a very positive start to the year, with the benchmark selling off nearly 5%. The strategy was able to largely sidestep the drawdown and was down ~0.88% for the quarter. A large part of the dispersion came in September with the benchmark down nearly 3% and the strategy up slightly, 0.26%.
Top 10 Holdings
|Ticker||Security Description||Portfolio Weight %|
|KRNT||KORNIT DIGITAL LTD||1.47%|
|ORMP||ORAMED PHARMACEUTICALS INC||1.27%|
|IDT||IDT CORP-CLASS B||1.21%|
|SD||SANDRIDGE ENERGY INC||1.13%|
As of 09.30.2021. Cash is not included.
The strategy is positioned to overweight or underweight sector allocations dependent on the relative strength of the investable universe and the portfolio allocation. The sector weight is entirely determined by the strength of the individual names in the portfolio and those that are selected based on the strategies technical buy process.
The portfolio saw a significant number of shifts this quarter as trends that have driven the portfolio through the start of the year began to break down. Consumer Cyclicals was the largest decrease over the quarter while Financials saw the single largest increase. The decrease in Consumer Cyclicals comes in line with its underperformance this quarter and the strength or stability that Financials have shown. Overall, the portfolios small Energy exposure was the driving factor in the portfolio’s outperformance.
As of 09.30.2021.
DWMC Macro Sector Changes
As of 09.30.2021.
John G. Lewis
Nasdaq Dorsey Wright
AdvisorShares Dorsey Wright Micro Cap ETF (DWMC) Portfolio Manager
Past Manager Commentary